As you get older, you begin to understand the importance of estate planning. As soon as your first child is born, you realize that a will is necessary. A trust could protect your child’s future inheritance, and pointing out guardianship in the case of your death becomes more than a passing thought.
There are many terms you may be unfamiliar with in estate planning. Legalese isn’t easy for everyone, so it’s best to get a good idea of what these terms mean before you sit down and try to understand a contract or to talk to your attorney about what you need. A little bit of education now can save you trouble later on.
These are a few terms to help you get started. They are a basic will, estate, executor and fiduciary. Each one is an important part of starting your estate plan.
A basic will isn’t just a will with minimal information. It’s a will that leaves behind all you own to your spouse. If your spouse is not living, then your assets pass to your children.
An estate is the collection of all your assets and property. Your estate includes homes, 401(k) accounts, your bank account, your vehicle and other items.
An executor is an important person to appoint. This individual takes care of your estate after you die. He or she makes sure your will is carried out and distributes your assets. This person is also in charge of paying off debts.
Finally, a fiduciary. Fiduciaries have a financial responsibility to you. For example, if you invest money into a trust, he or she is responsible for maintaining it and making good decisions with it.
These are just a few of many estate planning terms. Remember, starting a plan early can take away some of the stress for planning for your injury or death.
Source: FindLaw, “Estate Planning & Probate Dictionary,” accessed Dec. 11, 2017